318 rpm drops to 400 in gear WHY???

The cam is too large for the compression ratio and stall converter your friend is using. What gear ratio is in the car? with that cam you should be in the 3.90-1 ratio. The stall converter should be at least 3000 rpm, preferably 3500. Even with that cam, there should be at least 10-12 inches of vacuum at idle in neutral. The engine idle should be about 1000 rpm in drive with vacuum around 10 inches. The ignition timing should be about 10 degrees BTDC at idle in gear at 1000 RPM. 32 degrees advance is for total advance at 3000 to 3500 RPM. USe a set-back timing light to do this setting. The power valve in the carb should be at least three inches of vacuum less than the vacuum the engine draws when in gear. Carb primary jet for that small engine size should be 72 for a start, then do a plug check after a hard run and adjust the jet size from those readings. Now I hope that your friend is NOT using a double pumper carb, because that will kill off any throttle response you might hope to have when just off idle.